By David Poland poland@moviecitynews.com
Summ(it)ing Up
Summit is in a fascinating position.
They have a monster 5-film franchise that will generate over $2 billion in profit for the company.
They were capitalized at $1 billion.
They have had one other modest blockbuster in their 4 years in business. But if the company is at breakeven, excluding Twilight, it’s just by the skin of its teeth.
There is no Next Franchise in sight.
So what do you do?
You can hand out checks and every investor can feel good about doubling or tripling their money in just 4 years. You can hang on to all the money and not worry about profits and losses over the next 4 or 5 years, taking bigger risks, but not too big a risk on any one film or franchise… see whether lightening strikes again. You could use the cash to acquire another company or library.
it appears that Summit has come up with another option. Get some more cash by refinancing, pay out the investors 100% or so on their investment, Project a cash pool of about $1.5 billion to come in the next 18 months and that leaves the company with only the new $550m load as debt and about $1.3 billion in cash with a $200, credit line for production and distribution costs.
But then.. you have to keep doing business.
It must be a great feeling to have a debt-free indie studio business. And it is a great achievement to deliver a full return an investment on a high-risk new indie studio in just 4 years. And now, you’re gambling with “the house’s money.”
The question is, always, do you take the house’s money home or do you keep rolling those dice. It looks like Summit will keep rolling the dice. It’s almost as though this refinance puts Twilight behind them now and allows them to move on as though it never happened, but that they have removed the weight from the company’s shoulders.
It reminds me a lot, really, of DreamWorks going to and then leaving Paramount. DreamWorks had little choice – aside from SKG eating the company’s debt – other than to “sell” itself to someone. Paramount not only ate their debt, but funded the ongoing, albeit changed, operation, allowing them to recharge their collective batteries and reconfigure with Stacey Snider and some other new players. Coming out the other side, DreamWorks 3.0 is not self-funded, but is well supported by Reliance and it’s full steam ahead. DreamWorks chose to drop the distribution challenge off their plate and to hand it to Disney, where it will (quietly) co-market with the studio as well, though Disney will pay the tab.
Could Summit 2.0 integrate itself into a bigger distributor? That would be a smart play. Why wouldn’t anyone want to be DreamWorks/Imagine/Working Title if that was a completely viable option from “go”?
Will Summit 2.0 try to grow, making an acquisition like Lionsgate? That would be an ego play.
Should Summit 2.0 just keep rolling along as it has, hoping for more Reds, fewer Bandslams, and continuing to snap at the heels of the big boys while trying not to end up becoming a Bruce Springsteen song? That seems like it might be a grind after a $3 billion franchise and a Best Picture Oscar all turning up in the first two years of operation.
Greatest STUDIO SHEEN since vintage Orion drab.
All their movies have that same purple desaturated slickness. BEST COLOR TIMING EVER.
As long as it’s not CHARLIE SHEEN.
WINNING!
Where does “Knowing” fit into there? Cost a little less than “Red,” made just a little less than “Red,” both – I think – surprised Summit with their success and both came from banking on interesting filmmakers who brought a specific style to their projects.
Wasn’t LETTERS TO JULIET a Summit?
That was a hit, was it not?
dave’s referred to Letter to Juliet as one of Summit’s non vampire hits before.
They have certainly had successes. And they have had a bunch of complete misses. Like I wrote, without Twilight, it’s a breakeven company, probably.
As long as they don’t fuck up their remake of Highlander, Im cool with whatever they do.
K-STEW K-STEW K-STEW K-STEW K-STEW K-STEW K-STEW.
MOST BEAUTIFUL WOMAN EEEEEEEEEEEEEEEEEEEEEEEVER.
TWILIGHT = BETTER THAN STAR WARS. Better than JAMES CAMERON. Better than Batman.
TWILIGHT 4 EVER. BELLA = MMMMMMMMM LOOK AT HER.
Source Code is going to make them some money
I think Source Code is going to keep viewers away with its awful cgi shot of the exploding train. It’s awful.
But if the movie’s actually any good maybe they’ll coast on word of mouth.